Monday, June 16, 2014

On Business: Ten Cents

Maybe 10-15 years ago, I attended a panel at a comic convention in which the topic was comic book retailing. Or maybe the business of comics. Or possibly how to open your own comic shop. Something like that. I know most of the people who attended the panel (by show of hands when the question was asked by the panel) wanted to run their own comic shop. I had already figured by then that it was a pretty insane undertaking, and I was there mostly just to learn more about the industry in general.

One of the panelists was Chuck Rozanski, founder and owner of Mile High Comics. I've heard some people that don't care for his methods (or maybe him personally) but he's been selling comics for over forty years, so he clearly knows something about the business. As he was explaining some of the difficulties in running a comic shop, he threw out this interesting tidbit that's stuck with me: the value of a new comic book that is not sold in the first thirty days after publication is ten cents.

Meaning that if a retailer gets a shipment of new comic books, and doesn't sell every one of them within thirty days, the remaining ones are worth only ten cents each. They won't be priced at ten cents, of course; what Rozanski had done was calculate the length of time it normally takes to sell a comic older than one month, the amount of space such a comic book takes up in a store, how much that space costs, how much the issue itself cost, and subtract all that from the actual selling price of the book. After he took all those (and possibly more) variables into account, the remaining "profit" on selling such a book would be no more than one dime.

I'm sure that value was specific to his business at that time, and it's probably different for different businesses today. But the overall point Rozanski was making was that ordering new comics is challenging because you can't simply over-order and assume you'll be able to sell them all eventually anyway, so you can't lose money on the deal. His point was that, yes, you absolutely can and will lose money on any issues not sold in the first month. You might still sell the comic as a back issue but, after factoring in other real world costs, it won't amount to anything. Certainly not enough to offset the retailer's original purchase price.

I'm not sure how many other retailers made that same calculation, or how much Rozanski's number just got shopped around, but that ten cents is largely why you can go into a comic shop now and find very few back issues but a much larger stock of trade paperbacks than you used to be able to. The old pamphlet model that was developed as part of the direct market is effectively unsustainable, unless you're an incredible ordering wizard that is always able to divine the precise sales rate of every individual issue. But how many retailers do you know who are that good?

1 comment:

Brian Hibbs said...

Having SOME wastage isn't really any significant problem -- ask, say, every restaurant in the world, who, when they overbuy, can't even get ONE cent out of it. The problem is when you have TOO MUCH.

MOST DM retailers ARE really really good at ordering -- if they weren't, they'd close super fast.

-B